Mr. Chairman, I want to thank you for the opportunity to present the Administration's views of H.R. 1370. The bill would amend the National Wildlife Refuge System Administration Act of 1966 to authorize the Secretary of Interior to provide for maintenance and repair of buildings and properties located on lands in the Refuge System. The Administration supports the goals of this legislation; however, we have a number of concerns with the bill and would like to work with the committee to address these concerns to help improve the management and accountability of the refuge concession program.

HISTORY AND NEED FOR LEGISLATION

A brief review of relevant legislation and background information will help explain the need for this type of bill. Concessions (i.e., secretarially granted privileges) are defined as businesses operated by private enterprise that provide recreational, educational, and-interpretive opportunities for the visiting public. Aconcession provides a public service and, generally, requires some capital investment by the concessionaire and the Fish and Wildlife Service (Service) for facilities and products. The Secretary of the Interior (Secretary) delegated the authority to approve such ventures to the Director of the Fish and Wildlife Service in October 1957. It has since been delegated to the Regional Directors.

Since 1935, the Secretary has been authorized to sell or otherwise dispose of surplus products, to grant privileges on units of the Refuge System and to have the receipts be reserved in a separate fund known as the Refuge Revenue Sharing Fund (See Section 401 of the Act of June 15, 1935, 16 U.S.C. 715s). Subsection (b) of 16 U.S.C. 715s stipulates that the Secretary may pay any necessary expenses incurred in connection with the revenue-producing measures set forth in 715s(a). However, public recreation-related concession-generated revenues have not been utilized to offset concession-related refuge administration, capital improvements, and maintenance expenses because of competing priorities for refuge resources. Subsection (c) requires that the balance of the Fund be paid to counties in which lands are reserved from the public domain or acquired in fee and managed by the Service. In fiscal year 2000, the Refuge Revenue Sharing Fund received deposits of $6.7 million from sales and the disposal of property. Only $204,000 was deposited into this account from refuge concession programs.

The Refuge Recreation Act of 1962 (16 U.S.C. Sec. 460k through 460 k-3), as amended, allows for public recreation in fish and wildlife conservation areas as long as it is compatible with conservation purposes, is an incidental or secondary use, and is consistent with other Federal operations and primary objectives of the particular area.

Pursuant to the National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668dd-668ee), the Secretary is authorized to negotiate and enter into contracts with any person, public agency, or private enterprise for the provision of public accommodations when the Secretary determines such accommodations would not be inconsistent with the primary purpose for which the affected area was established.

Subsequent to that, in 1983, the Service's Regional Director from Region 3 requested that concessionaires at the Crab Orchard National Wildlife Refuge in Marion, Illinois, be allowed to pay for repairs to facilities there in lieu of making concessions payments to the refuge. This request was denied. On January 12, 1983, the Service's Solicitor in Fort Snelling, Minnesota, ruled that 40 U.S.C. 303c (an exemption to 40 U.S.C. 303b which requires all payments for leasing of buildings and property to be monetary in nature) was issued only with regard to the National Park Service. At that time, the Regional Director requested that the Service proceed with securing a similar exemption. This request was prepared by the Service's Legislative Counsel in 1984 and was forwarded to Honorable Thomas P. O'Neill, Jr., then-Speaker of the U.S. House of Representatives. Unfortunately, this was never acted upon.

In 1995, the Office of the Inspector General identified the need to improve the condition of concession facilities, to increase the fees paid to refuges by concessionaires, and the need to have concessionaires make repairs and improvements to the facilities (Audit Report No. 95-I- 376). The Office of the Inspector General has issued numerous reports on the management and administration of National Park Service concessions and Concessionaire Improvement Accounts. The National Park Service has an extensive concession program and any legislation to improve the refuge concession program should consider the recommendations included in these reports on managing concessions.

The Government Accounting Office (GAO) conducted an audit of government agencies providing concession opportunities in 1996. The GAO found that competition resulted in a higher rate of return from concession operations and that agencies that were allowed to retain the fees received a better rate of return. In agencies retaining fees, the average return to the government was 11.1 percent. In contrast, the concessions managed by agencies that did not retain fees averaged a 2.6 percent rate of return.

Most recently, the Refuge Improvement Act of 1997 (16 U.S.C. 668dd) established priority uses for the National Wildlife Refuge System. Hunting, fishing, wildlife observation and photography, environmental education and interpretation are the six priority uses that the System must provide, if they are deemed compatible with the purpose for which the refuge was established.
Finally, the Service is supplementing this statutory framework by developing policy on concession operations to provide guidance for issuing concession agreements under our current legislative mandates and authorities.

THE VALUE OF CONCESSIONS IN THE NATIONAL WILDLIFE REFUGE SYSTEM

Despite the long history of attention to the issue of concessions facilities on National Wildlife Refuges, the concessions program can be improved.

The Service utilizes concession operations as a valuable management tool by which it can provide recreational and educational services to the visiting public. In some instances, concession operations may be the best means for visitors to view and appreciate wildlife and, thus, to gain a better understanding of the purpose and mission of the National Wildlife Refuge System. In general, concessions help the Service achieve its mission to conserve, protect, and enhance fish and wildlife, plants and their habitats. They also help to educate the public about the importance of wildlife habitat preservation and the protection of ecosystems.

Concession operations also help refuge managers demonstrate that refuges can be an economic asset by attracting visitors to areas perhaps otherwise not visited. Current concession operations include services such as canoe rentals, guided naturalist tours, ferry operations to remote refuge islands, and fishing guides. All of these operations afford the public the opportunity to experience ``hands on'' the many features and advantages of a wildlife refuge, and to come away with a greater appreciation of how their tax dollars are being spent.

Despite the many advantages of concession operations, the Service currently has very few operations in place compared to the total number of refuges. Part of the reason for such few numbers of concessions is that current law (40 U.S.C. 303b) requires leasing of buildings and properties by concessionaires to be paid for monetary consideration only. Some refuge managers believe their best efforts to provide a cost-effective means of maintaining refuge facilities are hampered by not allowing non-monetary consideration be paid by concessionaires for such leases. Although the Service can pay for the administration, capital improvement, and maintenance expenses involved with a concession operation (as is allowed under subsection (b) of 16 U.S.C. 715s), other priorities exist.

We believe that improving the existing concessions program could begin with legislation similar to H.R. 1370 which, among other things, would allow the Fish and Wildlife Service to accept non-monetary considerations in lieu of concessions payments.

H.R. 1370

Legislation could improve refuge concessions management and accountability. The Administration supports the goals of H.R. 1370 and would like to work with the committee to strengthen and clarify provisions as described below.

H.R. 1370 would create a new Section 5(a)(1) which authorizes a concessionaire to maintain or repair any improvement on or in such land or water that the concessionaire is authorized to use for such purposes. This language is vague and should be modified to ensure that the maintenance and repairs are to lands and waters directly related to the concession.
Section 5(a)(2) allows the Secretary of the Interior to treat costs incurred by the concessionaire for maintenance or repair as consideration for the use of the refuge lands. In order to maintain accountability, the bill should specifically say what kind of maintenance and repairs qualify as consideration for use of the refuges. Otherwise, concessionaires could include a number of costs not intended to be included under the bill and would normally be considered part of doing business or carrying out a concession agreement. The Service would be happy to help identify specific costs to include.

H.R. 1370 should be amended to address possessory interests as they relate to improvements or new structures constructed by the concessionaire.

Issues with possessory interests have caused problems with National Park Service concessions and should be explicitly addressed in any bill designed to improve the refuge concession program. We will be more than happy to work with the committee to address this issue.
Additionally, the bill does not indicate how the non-monetary consideration would be calculated. Based on past experience with the National Park Service concession program, H.R. 1370 should ensure that concessionaire improvement accounts are not established.

Section 5(b) of the bill establishes that concession-related receipts shall be available to the Secretary for expenditure, without further appropriation, to increase the quality of the visitor experience and enhance the protection of resources. This means that an appropriate share of the concessionaire's gross receipts would be available to the refuge for contract administration, backlogged repair and maintenance projects, interpretation, signage, habitat or facility enhancement, resource preservation, annual operation, maintenance and law enforcement relating to public use. Precedent for returning a portion of revenues to the collecting field station is provided by the National Parks Omnibus Management Act of 1998 (P. L. 105-391). This law authorizes the return of 80 percent of the franchise fees (and other monetary considerations) collected at each Park Service unit to be used for visitor services and resource management programs and operations. The remaining 20 percent is returned to the National Park Service to address National Park Service-wide concessions costs.

If there is a mechanism to allow a portion of revenues to remain where they are generated, the Department believes that field stations with existing concessionaires will provide a higher quality experience for the visiting public. In addition, more field stations will be willing to pursue the option of providing recreational opportunities to the public through the use of concessions, benefiting neighboring communities in meaningful ways. The key, however, in the spirit of being accountable to the users, is that there must be a linkage between the revenue coming in and the use of those funds. The bill should clearly establish this linkage to prevent fees and other payments from simply supplementing annual appropriations for the refuge system.
We do need to point out, however, these funds would no longer be available to communities through the Refuge Revenue Sharing Fund. Without knowing how to calculate non-monetary consideration it is difficult to estimate what the overall impact of this section would be on individual counties. We would be happy to prepare such information for further consideration of this bill.

Finally, section 5((b)(3) should be clarified. We would be happy to work with the committee to strengthen this language.

CONCLUSION

The Administration supports the goals of H.R. 1370 and looks forward to working with the Committee to address its concerns during this exciting time. As the National Wildlife Refuge System approaches its centennial anniversary in 2003, the Service is working hard to ensure that visitors find national wildlife refuges welcoming, safe, and accessible, with a variety of opportunities to enjoy and appreciate America's fish, wildlife and plants. We intend to host thousands of activities for the public nationwide throughout and beyond 2003. We want people in communities to become aware of local national wildlife refuges, to understand that each refuge is part of the National Wildlife Refuge System, and to realize how refuges can contribute to tourism and enhance local economies even while placing wildlife first.

Providing quality wildlife-dependent recreational opportunities is part of the Service's vision for the Refuge System. Concession operations can provide the visiting public with a means to access and interpret refuge ecosystems. Yet due to disincentives in current concessions law, concessions are greatly underutilized throughout the refuge system. We look forward to working together to help ensure that the Service's concessions system will be more efficient and economical and improve the quality of the visitor experience at existing concessions operations without compromising overall management and accountability of the refuge concessions program.

A properly managed concessions program will help accomplish the Service's desire to build a broader base of public support for wildlife conservation by reaching out and involving a larger cross section of the American public in public use programs and community partnership efforts. Further, concession-generated visitation can demonstrate to local communities that refuges are an economic asset. Part of the dialogue with communities and their leaders should be a full accounting of the impacts refuges have in local communities, both economically and through intangible contributions to quality of life.

Thank you, Mr. Chairman, for giving me the opportunity to discuss this legislation with you. I will be happy to answer any questions the Committee might have.